Europe close: Stocks lower as investors look to Fed
European shares ended Thursday in the red, as investors took a cautious stance ahead of a key two-day meeting of US Federal Reserve policymakers, while a German consumer survey showed sentiment weakening.
The pan-regional Stoxx 600 index was down 0.3%, with all major bourses on the continent lower.
Germany’s DAX was down 0.42% after a survey revealed sentiment among consumers darkened heading into September, as accelerating inflation and rising Covid-19 cases made them more hesitant to buy.
The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -1.2 points for September, from a revised -0.4 points a month earlier and compared with a forecast reading of -0.7.
"Prices have been rising rapidly since the middle of this year. This has a dampening effect on the consumer mood," GfK consumer expert Rolf Buerkl said in a statement.
Across the pond, the Fed’s Jackson Hole symposium started on Thursday, with markets looking ahead on Friday’s closing remarks from chair Jerome Powell for indications on when the central bank may begin tapering its stimulus program.
Investors were also digesting data released stateside in the afternoon, with the number of Americans filing for unemployment benefits rose a little more than expected last week, but remaining near a pandemic low.
US initial jobless claims pushed up by 4,000 to 353,000 from the previous week’s level, which was revised up by 1,000 - analysts had expected a level of 350,000.
Separate data from the Commerce Department showed that US GDP rose at an annualised pace of 6.6% in the second quarter, coming in ahead of an initial estimate of 6.5% but a touch below analysts’ expectations for 6.7% growth.
That followed 6.3% growth in the previous quarter.
Pantheon Macroeconomics said: "A repeat of last week’s 28K drop was never in the cards; the seasonals were much less friendly this week.
"The downward trend in claims continues, despite the Covid Delta wave, presumably because the bar to letting staff go is very high, given the tightness of the labour market. Firms can’t be sure they’ll be able to rehire people laid off now.”
In equity news, shares in building materials supplier CRH rose 3.92% as the company lifted annual guidance after a 25% jump in interim core earnings.
Polymetal International fell 3.61% despite reporting an improved interim profit.
Deutsche Bank’s asset management arm DWS Group slid on a report US authorities were investigating the company over sustainability claims, with Deutsche Bank shares down as well.
France’s Vivendi rose 2.64% after its unit Universal Music Group said it expects further revenue growth this year and it aims to pay out dividends once it lists in Amsterdam.
French conglomerate Bouygues gained 1.14% as it raised its full-year earnings outlook.